Q3 2023 Avadel Pharmaceuticals PLC Earnings Call
Yeah.
Greetings and welcome to the other day on Pharmaceuticals third quarter 2023 earnings call.
At this time all participants are in a listen only mode.
And answer session will follow the formal presentation.
A reminder, this conference is being recorded.
It is now my pleasure to introduce Austin Murtaugh with Stern Investor Relations you may begin.
Good morning, and thank you for joining us on our conference call to discuss <unk> third quarter 2023 earnings as a reminder, before we begin the following presentation includes several matters that constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 forward look.
The statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements. These risks and uncertainties are described in <unk> public filings under the Exchange Act included in the Form 10-K for the year ended December 31, 2022, which was <unk>.
Filed on March 29, 2023, and subsequent SEC filings, except as required by law <unk> undertakes no obligation to update or revise any forward looking statements contained in this presentation to reflect new information future events or otherwise on the call today are Greg Davis, Chief Executive Officer.
Richard Kim Chief Commercial Officer, and Tom <unk>, Chief Financial Officer.
Dr. Jennifer Goodman, Senior Vice President of medical and clinical Affairs will join us for Q&A at this time I will turn the call over to Greg.
Thank you Austin good morning, everyone and thank you for joining us to review <unk> third quarter 2023 results were.
We're excited to share the progress we've made with our market movements.
Following my opening remarks, Richard will provide an update on our launch progress Tom.
Tom will provide a review of our Q3 financial results and we will conclude with a question and answer session.
The third quarter was transformational for <unk> as we fully transition to a commercial stage company and are very pleased with the robust early demand generated an important emerging loss trends we are seeing.
There is a tremendous opportunity for Lou right and add it all that lies ahead as we execute our launch we believe the foundation. We are building. During these early months positions us incredibly well for continued success building on the momentum built during its first full quarter of launch.
During Q3 this momentum resulted in growth across all key launch metrics, representing strong demand across all three patient segment of the eligible narcolepsy patient population and generated $7 million in boom right net revenue.
There is no better evidence of this in the early launch Kpis, we announced this morning.
Greater than 1000 patients enrolled in right up at more than 400 patients who initiated therapy during the quarter. The majority of which are fully reimbursed.
Expanded room nights payer coverage with key health plans, representing approximately 60% of all commercial lives and this progress on the payer front continues to create even greater access for the 600 patients enrolled in our rides up patient services program and in process of updating coverage and getting our low rise as of September <unk>.
Okay.
Additionally, there are nearly 4500 health care providers, who have now completed the <unk> rems certification process, including providers, who have never previously prescribed in Oxford.
We're very encouraged by these early Kpis and believe they are indicators of strong interest and positive engagement, we've had with all stakeholders as we've advanced the launch that rumor.
Furthermore to support the robust clinical data or arise our team recently attended world sleep in Rio de Janeiro, Brazil, where we shared 15 poster presentations and two oral presentations detailing new and encore data further demonstrating the clinical profile a clear benefit of low rise for potential.
Eligible patients.
And looking forward to the future. Our team is also advancing our lifecycle management opportunities as we believe this has the potential to expand the patient population, who can benefit from whom rights and provide long term value to the company and our stakeholders.
We are pleased to announce that yesterday, we submitted a supplemental new drug application to the FDA for Lou rise in the pediatric narcolepsy population for the treatment of cataplexy or Etfs.
And currently expect an approval decision in the second half of 2024.
Comprising approximately 45% of the current total occupied treated narcolepsy population.
Expanding availability into the pediatric population not only increases the total addressable market for room nights.
But also has the potential to greatly alleviate the burden on families and caregivers, who support children living with narcolepsy.
We believe these families and caregivers will welcome a what their bedtime octavate treatment option at the twice nightly dosing regimen of first generation Octavate inevitably requires potentially multiple people in the household to chronically what it got night after night to administer the second dose or their children.
Additionally, we're making progress with our clinical planning to initiate a multicenter randomized controlled trial for idiopathic hypersomnia or IH and we believe based upon our interactions with key opinion leaders at the value proposition of what their bedtime, Mumbai could be very compelling for those suffering from the deep sleep inertia.
Associated with IH.
And last thing on our lifecycle management product, we are continuing our preclinical development of our potential no or low sodium once at bedtime octavate formulation for the small subset of sodium sensitive octavate eligible patients as always we intend to provide updates on these programs as appropriate.
With a strong balance sheet to support ongoing operations and the significant progress achieved in the initial months of the launch we remain hyper focused on the room rate loss and expanding our reach and our impact.
We are committed to and remain relentless in delivering on the promise of room nights for all stakeholders.
And with this positive momentum coming out of Q3, we believe we are on track to command a meaningful share of the multibillion dollar octavate market and maintain our view that <unk> is a greater than $1 billion annual revenue opportunity.
With that I'll turn the call over to Richard for details on our recent commercial progress Richard.
Thanks, Greg and good morning, everyone.
So great to be on the call today to discuss our first quarter of launch.
Let me start by saying, it's a real privilege to bring them up to the northwest acuity.
In August our full commercial team has been in the field GMP specialty coffee country and.
And the overall feedback has been extremely positive.
We've heard for a long time about the impact about once at bedtime octavate that it could have a peak with narcolepsy and now we are about to see that impact of the crisis happening each and every day.
We consistently hear from an occupancy community that there might have potential to pay people in narcolepsy beyond their expectations of other available treatment options.
I'd like to start with one example of the many interactions we've had with these specialists and the impact of that is happening.
During a recent field right we might look at these sessions and.
And relative first person to rise up in August.
The patient started a few weeks later.
Now this patient with previously taken the first duration mix salt product and switched to seven five grams of once that bad patented rice.
The patients remain on 75 grams per night, if consistently speaking to the night and she said we accept more refreshed in the morning, when it starts per day.
Numerex has been an absolute game changer for these patients.
While this is just one example of a journey to gain initial handling clinical experience.
These special had great initial success at <unk>.
Subsequently committed or more patient enrollment into right now.
To Echo Greg we are Super excited about the strong start we've had and believe our progress reflects the clinical benefit of Liberum.
Our three strategic preparation.
And the hard work and dedication of our team.
We're pleased to share today, that's where our first full quarter of launch there were greater than 1000 patient enrollment into right that our patient support center.
From a rocket data enrollment and patients on therapy are coming from all three of our target patient segments.
Switch patients from Firstenergy Octavate.
Patients, who previously tried to discontinuation.
Our first generation arc debate and Akshay naive patients.
Thus far we are seeing early trends that the majority are being sourced from first generation <unk> base with slightly more coming from the twice the mixed salt product compared to the twice and we can still get market based products.
Through the end of September there were nearly 1400 HCP to a rems certified.
As a reminder, our core target Hep's includes the 600 high volume prescribers, who make up 80% of the total market prescription volume.
The greatest penetration of Rems certified Hep's has come from beef highlighting arcade subscribers.
And they account for about three quarters of all right the enrollment thus far.
Although the transfer rise up early with patients coming from previously discontinued personalization of occupation.
Also operating eight patients and <unk>.
Prescribers, who had previously never prescribing octavate, our early data set for assume rates growing the market beyond the limitations of first generation twice, maybe octavate Octavate where you.
Supported by the increasing number of Brightcove enrollments today, we also announced in the third quarter, we had greater than 400 patients who initiated treatment otherwise.
We saw the number of patients on the rates of growth within the quarter as more payer coverage began to come online.
The majority of patients initiated with <unk>, our commercial reimbursed.
Additionally, and although early in launch.
Seeing distant huge dislocation trends that are lowered it to 25% discontinuation rate at one month of first generation oxalates.
When we think about all the time it takes to fulfill enrollment in that cases shifting arise. There are generally two main patient segments that are emerging.
Those who have coverage with our operational criteria.
These patients can be processed and shipped product on average in about a month.
As our covenant Payors to expand this segments of patients will continue to grow.
Now for patients going to medical necessity without a formal coverage policy decision.
This generally consistent payer denial and ACP appeal, a process that can take longer more.
More like a couple of months on average with some quite a bit sooner and some taking even a bit longer.
This segment is getting smaller as our coverage growth however, and very importantly, despite these cases are taking longer to fulfill we also see very few people dropping out of the <unk> process.
At the end of September approximately 600 patients were in the process.
Going through the benefits investigation or pending a per shipment.
Based on early loss trends through Q3, we currently anticipate that the majority of these patients will convert absolutely right as they complete their IPO process.
Product fulfillment is very dynamic and we are in a fundamentally stronger base with east of rides up and our services than we were just a couple of months ago.
More important is that the specialist offices are getting increased experience with enrollment process and are beginning to send additional patients right.
Now that's a nice segue to transitioning Payors, where we continue to make strong progress in shrink broad coverage brothers.
Currently earmarked as Curtis policies with over $100 million insured lives, representing approximately 60% of the totally commercially covered lives.
We recently added coverage of policies in place with key national insurers like Aetna Cigna. In addition to several regional and state plans.
We also completed the zinc GPO contract, where importantly, we mark will be moved to a preferred status with the Cvs commercial formulary effective January one 2024 <unk>.
Currently there might have been non preferred position.
We are very pleased with our payer progress and importantly feedback to see specialist offices has generally been very positive for the early success rate for our reimbursement team.
These first few months have set a great foundation for our launch as we see demand from numerous continue to grow <unk>.
<unk> and our teams are proving the efficiency for getting patients started sustainable.
And more covered lives of patient Payors.
We could not be prouder of the collective work of our team.
And bringing new masks in our proxy committee, along with the progress and trends we've seen to date.
We look forward to providing more update on future calls and now I will turn the call over to Tom to discuss our financials Tom.
Thank you Richard I will note the full financial results are available in the press release and the 10-Q.
We're pleased to report that we generated $7 million in net revenue for the third quarter ending September 32023, and.
And $8 5 million in total revenue since our launch began in June of 2023.
We're continuously monitoring inventory levels in the channel and during the course of the third quarter. We estimated that it was consistently between three to four weeks of demand, including as we exited the quarter.
Turning to operating expenses, we reported a total of $42 million of GAAP operating expenses during the quarter ended September 32023.
This includes $39 2 million of SG&A costs, and $2 8 million of R&D costs.
Operating expenses includes $4 6 million of noncash charges for stock based compensation and depreciation and amortization.
After adjusting for these items cash operating expenses were $37 4 million for the quarter.
And we are currently expecting cash operating expenses in the fourth quarter to be in the range of $38 million to $40 million.
With respect to the balance sheet, we exited Q3 in a strong position.
As of September 32023, we had $153 2 million of cash cash equivalents and marketable securities which includes $30 million received in August from the first tranche of the $75 million royalty financing commitment we secured earlier this year.
A second tranche of 45 million is available if we achieved $25 million of quarterly net revenue by June 32024.
And as a reminder, while the $45 million could be available we're not required to draw the second tranche.
As we look ahead, we believe based on current plans and expectations that we can achieve cash flow breakeven from operations. When there are approximately 3500 1500 reimbursed patients being treated with linzess.
Our expectation is taken into account a number of assumptions, including capital resources currently available to us patient demand net pricing of <unk> and ongoing cost structure to support the launch of <unk>.
Actual results versus these assumptions in addition to ongoing planning for growth initiatives, such as NIAID study could impact our expectations regarding future capital requirements.
And on a final note at September 30, we had approximately $21 million convertible notes shown as debt on the balance sheet. This last remaining tranche of debt was settled in cash at the beginning of October and effective with that pay down the balance sheet is now completely free of convertible debt.
I'll now turn the call back to Gregg for closing remarks.
Thank you Tom We believe our strong foundation has supported our successful initial launch of whom rise and we are laser focused on continuing to execute on all of our priorities.
Our goal since the inception of <unk> has been to provide treatment that can transform the lives of those living with narcolepsy and we believe we've made significant progress in this area and look forward to our continued launch execution and positively impacted even more patients.
We thank you for your support and look forward to providing future updates on our progress and with that we will open the call for questions operator.
Thank you.
In order to answer or excuse me in order to ask a question you will need to press star one on your telephone and wait for your name to be announced.
To withdraw your question. Please press star one again.
We do ask that you limit yourself to one question and a follow up please.
Please standby, while we compile the Q&A roster.
Our first question comes from <unk> <unk> from <unk>.
Needham Your line is open.
Hi, good morning, Congrats on the nice update on the launch I have one quick question.
Firstly can you talk about the rate at which Youre seeing.
Enrollment in <unk>, and maybe give us some more color on where these patients are coming from.
In terms of whether they're coming from <unk>.
Patients, who could maybe give us some more color there.
Yes, Thanks, Tommy Richard do you want to.
Yes, hey, thanks, Amit.
It's really been fantastic to see the interest that asked the question about what you are right and we're Super pleased that when we gave our first update about two months since launch to about 400 patient growth into right now and then in the next two months about an effort, particularly the pieces have come on board.
Really good momentum.
Maybe holistically as we start to think about the launch the first thing we sort of say is when we see.
We have really yet to see one who haven't seen the clinical value proposition that we write.
And when we think about the trends going forward, we havent really seen what I would describe as bullets as many offices, but really more of a.
Steady influx of patients being seen in the regular course of follow up which is about every three to nine months.
So when we start to think about sort of going forward.
For a fee.
Continued demand for <unk>. We also know that the holidays are coming up sort of as we get into November and December. So just I think good counterpart.
But our focus remains very much on the execution and obviously patient activation.
It will stay in the future. We do think things we've seen when coverage policy changes have occurred they can act as a catalyst as we bought for CBS early earlier question.
What's your preferred should help us as we go into January and we continue to work that we have with our MSR GPO contract as well now speaking to the types of patients.
We can typically thrifty FERC from all three patient segments switch.
Discontinued previously and naive and thus far through the launch we're seeing the majority coming from previously experienced box that are currently on our communications with more tending toward coming from the mixed Boston twice nightly sodium box space as well.
It's out there Amit its real its been awesome to be less deal for all of us as always.
The more that we can do but we're pleased with the progress we've made so far.
Great and maybe just on the coverage front.
You talked about.
Currently having.
Over $100 million in shelf life.
How should we think about the remaining and when.
Give us some sense of the timeframe into 2024 efficacy.
This expense. Thank you, yes, sure we're pretty selfish we want as many covered lives will be possibly some guests because that's really the gateway to getting patients onto therapy. So the general proposition get on you get the GPO contract signed then we have a culture with major pbms or the fact that we've been doing that under both the <unk> or the <unk>.
By contract now.
That contract as well the third one is the MSR are sort of Optum United lives. It always takes longer.
We've made very good progress there and we fully anticipate growing our covered lives as we go forward here as well so I mean to be where we are.
Through our first full quarter of watching habits coverage has been pretty impressive and I think what's really tight on their marketplaces. The general feedback we hear from providers being maybe pleasantly surprised with the reimbursement rates that theyre seeing so sort of like many of our metrics were looking sort of upward into the right tech or covered lives going forward.
Great. Thank you.
Thank you for your question.
One moment please.
Our next question comes from Andrew Tsai with Jefferies. Your line is open.
Hey, just wanted to say congrats.
That as well.
Really great to see the launch.
Going very well so far.
First question on the conversion rate and it looks like you got.
Sign ups in the quarter 400, essentially getting treatment. So loosely speaking it seems like a 40% conversion rate give or take and I think you said in the prepared remarks.
Majority.
Will convert from rise up so is it fair to assume that 40% conversion rate moves up meaningfully going forward.
Then secondly, if.
If you were to take another cut.
The kpis as of today November 8th how would those leading indicators like just wanted to make sure. These numbers are not a onetime bolus that you are seeing even more patients signed up in trade and things are moving up and to the right.
Yes, Thanks, Andrew Here's how I would answer those questions first off in terms of your 40% its really apples to oranges a little bit.
And the 40% is certainly not the majority in our commentary what we've seen for patients who have been in the system for for at least some period of time that our conversion rates to on therapy is certainly the majority of patients.
So we would expect 40% not as the right proxy currently in terms of what we're seeing early on in the launch and obviously, that's a number we want to continue to improve on.
Payer coverage decisions and whatnot are really important advances.
Progress made on the payer front has certainly been beneficial to us and seeing a majority of patients converting onto therapy and the majority of those converting onto to reimburse drug.
Secondly to your comment about what are the how.
Does it for early part of Q4 look again I think we've seen we've continued to see more enrollments and more people go on therapy and growth continue so yes.
Yes, I mean, I think we feel really good where we sit and the progress we're making across all fronts and knowing that there's a whole lot more to do but we're really pleased where we sit today.
Thanks very much.
Andrew.
Yes.
Our next question comes from Marc Goodman with Leerink partners Mark Your line is open.
Thanks for taking my question, just maybe on a LIFO mark.
Final question regarding <unk>.
Your patient denim here. So you mentioned that most of the patients switching from first Gen Oxy paid products.
Just curious what are the feedback you've been hearing from these patients.
Especially those who switch from <unk> and <unk>.
What are your strategy to penetrate patients who are.
<unk>, who previously treated discontinued.
Yeah, Hey, thanks for the question, yes, as we talked about in our prepared remarks.
When we think about the source of patients thus far.
The majority of our Firstenergy octavate.
Second narrative that I gave early on was one that represents many of the conversations we've had about patients switching from sideways.
One of the insights we have from that even if a couple of years ago, where a lot of the patients.
The mixed operation early on at the tenant to be early adopters of product they tend to be diagnosed for a short period of time switching looking for more to do for their treatment. So we havent been horribly surprised the fact that we've had mixed fault patients coming on to the rate that we have thus far.
About going forward.
Really nice thing about our execution is when we think about.
Narcolepsy.
Two three years with prescribers.
Very concentrated physician base 4500 makeup the entire universe 16, 180% of volume so those extra naive and discontinued patients generally are in the same offices at the people that we're seeing where the push opportunities are as well. So I think what we have seen it.
It depends where the patient the physicians on their journey, but we've also sort of seen a nice uptick in both the previously discontinued and the naive patients as well. So we're just very pleased to see the pull through of our strategy.
Coming from all three patient segment, yes, I think where are we in some to some extent, it's also a bit of a math equation as well because.
There are just meaningfully more patients and officers who are on existing therapies today than those who are truly newly diagnosed with the average annual newly diagnosed rate is around 3000 patients per year.
And 80% of those are in our primary targets. The average target has one or one five patients per year. So again those will continue to come in the ordinary course as they come in and we certainly are messaging around the importance of boom right. Your new starts as well, but I think also you're seeing just a manifestation of early in the launch kind of the math.
Equation of more intervention opportunities for those who are on therapy.
We're coming in as potential Neustar.
Got it okay. That's all helpful. Okay can you also talk about the growth side any color would be helpful.
On the gross to net.
Yes.
Yeah, so listen at this stage of the launch.
Early.
And.
We haven't quite reached a steady state in gross nets, theres more payer contracts to be got done.
Payer mix is certainly going to affect the gross to nets.
We're looking forward.
When we think continues to be a reasonable target to assume really on a net revenue per patient basis, it's about 120000 per year.
We're not there today just to be clear we have patients that are starting therapy going through with titration schedule on lower doses.
But ultimately as we move forward to a steady state, we think that 120000 per year per patient as a reasonable a reasonable assumption.
Got it thank you.
Thank you for your question.
Our next question comes from Matt Kaplan with Ladenburg Thalmann. Your line is open.
Hey, good morning, guys and congrats on a nice quarter.
I just wanted to dig in a little bit more into the process.
Patients passing through or working our way through the rise up.
Sure.
And can you give us a little bit more detail in terms of.
The.
Percentage of patients that start in rise up that actually initiate therapy.
Yeah, Hey, Matt Thanks for the question.
Barton process concern, it's really sort of broken up into three key steps.
The first is really the enrollment.
The enrollment form which is almost synonymous with the prescription already beginning that process.
And that really guessing is going where the next phase is really the benefit investigation really sort of checking out the insurance. The patient have included that amount of time is going to be very depending on whether or not this coverage or not.
But then the third step in the.
The process is one of the specialty pharmacies get to be involved we need to begin to triage patients to ultimately confirmed a shipment date with the patients. So those are I would call. It relatively center processes, maybe one that's a little bit unique to US is one lakh requirement that the life of our Rems.
Process as well as our.
Especially pharmacies for numerous half to confirm whether or not reasonable velocities treatment with another.
Debate.
That does take a little bit Walker asked a little bit the process, but those are really the three key steps that go forward.
And what we can say is our processes are working very well, we're seeing that with the fulfillment today and we do expect throughout the timelines recovery to continue to improve as well.
And your second question again, Matt.
And kind of the percentage the percentage of patients that actually that and sort of the rise up and then.
Initiate therapy at this point, yes, I mean.
The way, we can sort of maybe do the math right now critical through where we are thus far is like.
We have we have.
Therefore, with Aten enrollment through September 400 initiated in any great get have some commentary also almost 600 patients for us on the process. What we would foresee first is we've seen very few of those dropout and we do expect going forward that the majority of these remains 600 patients to be initiated until the right. So the.
The numbers are some of the math somewhere between those numbers there as well.
We also expect that the majority of those to be initiated on to reimburse product as well so.
Once again it's.
These are probably the parts better than.
The most.
Yes.
Focused focal point for us early on the launch, but we're really pleased with that.
So we've made we're pleased that we're actually getting patients onto the horizon. As we said we believe that our conversion rates will just improve as time goes on as well.
And in terms of the time.
To move through the rise up process do you expect that to improve as.
Similarly, with getting the preferred position with Cvs starting at the beginning of the year with other with other.
Payers coming online as well and moving to preferred position or do you think it will still remain the same in terms of kind of one month to treatment for <unk> patients.
Yes, it's a great comment Matt, Yes, I think you sort of nailed. It first is sort of that mix that sort of pace coming through with coverage versus those who don't and obviously, we sort of see the covered lives continue to improve as we go forward here as well so that should improve our overall timelines and then what happens as well as the offices just get more experience and more familiar with our process. So.
Both of those are occurring it's very dynamic, but we see both of those drivers for our us here prove our efficiency going forward.
And then and then maybe last question.
One of the goals you have is expanding the existing oxalate prescriber base, obviously longer term growing it very early in our launch.
Can you.
Tell us a little bit about what youre seeing so far early in the launch in terms of expanding the.
The prescriber base to new prescribers.
Yes, sure Matt right now at the beginning of the launch were much more hyper focused on those with Oxford experienced in 2500, who have who manage 80% of the total prescription volume, but just curious what's been going on for.
Youre going to office, there may be some who had previously never prescribed now.
When we've been going into one of the more highly occupied prescriber, but the other thing thats been going on as we've just heard a theme spontaneous people coming through our Rems certification that we hadn't Hoffmann who have put their hand up and has begun enrollment process as well. So although it has not been a focal point for us it's been a nice breakfast, where see people coming out of it.
At work that maybe werent really our intention to call on as well.
We're going to stay hyper focused on where sort of the oxalate volume today, but clearly as time goes on and we see the opportunity gain more people coming to the prescribing mix as well.
Okay makes sense. Thanks.
Thank you Matt.
Our next question comes from swim fence, Bob Bob from Oppenheimer. Your line is open.
Hi, Thanks for taking the questions and congrats on the.
Early progress here.
Can you maybe touch on we talked about the three buckets of patients and where they are coming from but can you maybe help us understand how the ags may be affecting each bucket and what youre seeing so far in terms of.
Patient going through an authorized generic.
Yes, Hey, Brian Thanks for the question. So yes, we're super pleased with the progress so far in.
It's nice that we are seeing enrolled.
Enrollment is coming from all three of the patient buckets as you've mentioned so.
Obviously, what's been nice is reading.
Then from all three segments by the AG overall that we are actually Pat also converting patients who are currently on an AG coming on until we right and as far as discontinued we havent really seen.
That many AG continues to be a relatively new so the source of the issues is predominant coming from those who are switching from an observation.
We're also seeing clearly 90 patients never being exposed to any personnel octavate as well so it's still a bit early but the real source for us. If we're ags are concerned are.
Switching from current expectations, and we really haven't sort of seen what I would call. It seen as an impediment of AG impacting the ability to get us thus far.
Great. Thank you.
Okay.
Thank you Julien.
Our next question Kannan.
Mary Ann Bell Giddy with lifestyle capital your line is open.
Hi, Good morning, and thank you for taking my question and congratulations on the progress.
So my question is around payers and congratulations again on gaining preferred status with Cvs just can you provide a little more detail with regards to discussions with parents.
Kind of what's your expectation.
Payers when it comes to preferred status is there something you are actively trying to achieve.
And the other question just more color on the pediatric opportunity.
And what are the main reasons for not taking debate in OIBDA dynamics.
Alex.
When it comes to boost our agenda going forward.
Sure. Thanks, I'll start with the payer question. So yes, our overall strategy with payers has been to sort of unencumbered access through any akshay.
Be it the best sort of status quickly.
First at the Octavate, thus far.
Thus far with the <unk> three or <unk>.
So contracts that we've achieved and that is our goal going forward as well I mentioned, the fact that we have ongoing conversations with R&D net optimized. So whatever is the best status, which is generally a preferred status for the oxalate that is our goal and thus far we've been very pleased with what we've been achieving thus far I will turn the pediatric question over to Jeff.
Thanks, so much for the interest in pediatrics, we have heard.
For years now of the desperate need for a pediatric form the oxycodone market that did not require waking up in the middle of the night that has been the primary drivers were at the scene <unk> indication.
Regarding to whether it's different the clinical need compared to adult.
Really important for adult to not have to have chronically breakup and it's true that sometimes an adult patient waking up the author.
Ed partner the reality is for children. You are 17 17. They are typically having at least one if not both parent chronically waking up in the middle of a 93 administrated dose.
<unk> had conversations with parents Peel out we're happy to commit letters of support for the pediatric supplement describing how challenging it was never have an uninterrupted nicely for those children and for themselves.
Second part of your question in regard to OEM.
We see with clinicians is they may identify as very small.
Barry adult population, who they consider to be <unk>.
<unk> been an issue as we've been discussing with ODM within many kols healed.
To bring this option to them, particularly if possible yes, the only thing I would add regarding the pediatric who's really just I would characterize it is.
Unbelievably consistent, albeit anecdotal, which is every time you talk to a physician about boom ryzen narcolepsy. The next two questions you get from them universally is what are you going to get pediatrics and when are you going to study at NIH. So.
It's very consistent when we talk to doctors about that so hence why we're going down this path.
Thank you for the clarity.
Thank you for your question.
Our next question comes from David <unk> from Piper Sandler Your line is open.
Okay.
A few here.
One is you talk about sales force.
Is there any longer term.
So how you're thinking about.
Any DTC.
Spend.
Review that.
Your competitor.
Disease awareness lay the groundwork for you.
With its initiatives talk about that.
Number two is I may have missed this.
Can you talk about the mix between.
One in narcolepsy.
Do you get any traction.
<unk>.
<unk>.
Versus another and what's your expectation regarding the <unk>.
Between two electrodes.
Yes.
Yes, hey, thanks, David So as far Salesforce type of concern to your point today. We're at 49 sales Representatives. We also have Arca reimbursement team.
What can we buy it's really going against the opportunity for our space right. Now that 4500 prescribers are 49 represented sort of allow us to cover up to about 6000, maybe 6500 physicians. So that gives us the space to cover our current opportunity and benefit.
I'd say longer term I mean, right now, we actually where our focal point is is getting occupied experienced prescribers comfortable with using the rides as well longer term, let's wait and see what the mix is but I would say for the foreseeable future. We really don't see the need to expand the size of our sales force.
Now when it comes to PTC, So we wouldn't really caught more sort of patient activation and patient media here.
First any news.
Media on Narcolepsy, we think is a good thing for a rare condition.
Generally our pilot really been to try to meet patients where they are and they spent a lot of time essentially being active as well. So we've been very targeted about pacing media and engagement through the sources, where they go read at Facebook and other sources and we have a couple of other novel approaches that we're doing in and around specialty offices as well so.
Our approach with patients with I would say a little bit more surgical as.
As opposed to shop there.
And as far as <unk> is concerned it's a little bit model from our datasets for looking at that but what we know historically is even though the prevalent shows about a 30% <unk>, 7% <unk> for octavate that actually historically.
The opposite you said, 70% <unk>, 30% and you too so I think maybe in future. We can provide some insights into some of those trends as more usage of price increases.
Thank you.
Thank you.
Our next question comes from Keith Knickerbocker with <unk>. Your line is open.
Okay.
Hey, good morning, guys. Thanks for the questions. Just first I wanted to ask another question sorry to belabor the point here on pull through from rides up maybe just asking it a different way if we look specifically at the patients within the <unk>.
400 that we're on.
Rides up that exited Q2.
Not on therapy, what was the conversion percentage specifically with those patients within Q3.
Yeah, Hey Chase.
The majority of those patients who were enrollment at the end of our Q2 <unk> thousand for future rates did convert onto product now we haven't given specifics on the exact percentage because some of its dynamic I'll give you. One example, we have patients who enrolled in June who just got reimbursement ship product in October so.
When we think about those two sort of buckets of covered lives versus not the covered lives through could be quicker than those who aren't.
Our general philosophy is.
Physician prescribes lunar effort is going to go to the end of the Earth to get them on that if we see a care pathway forward and.
Like I said, we have examples of June enrollment, taking it for several months, but actually getting them across the finish line as well. So I think it's still dynamic.
So the majority of it did and we just received with more time that that number should be increasing from that cohort and every corporate as well.
Is there an amount of time, where they're on within rise up that you do start to see some drop outs is there like is it three months four months and then just another quickly any feedback from the field as far as anecdotal kind of experiences with how the tight trading has gone for new patients.
And whether or not theres, a difference for whether or not a patient has been experienced with the first gen. <unk> four years versus they've been on for six months any sort of color there would be helpful.
Yes.
The penetration for the new patients.
First aid.
From a physician that tends to be a bit of a mix. So perhaps you can help slow pay traders, who want to sort of take their time to sort of get up to that and I think on the other side you have people can get there a little bit more quickly than I think.
Dominic physician dependent on sort of their approach. So it's been a bit of a mixed mixed bag and searches what was your first question again.
Just for the patients that you do see drop out of rise up even if it is a small number or is there like a number of months.
You start to see some fallouts.
Or is there not really been a clear trend.
Yes.
I mean, we're sort of getting to that time, where somebody has to review enrollment they may tend to drop off a bit.
Some of that may be efforts option of going through the medical necessity pathway or from the patient. So we will start to see some of those patients start to drop off her as more kind of has gone by for past launches. What may happen is they may revisit the conversation again into next visit with their specialty again, but definitely after some period of time the success rate.
After sort of four five months that we start to go down yes, I would just add that to your question around the 400 cohort. We're very pleased with the percent that is converted described it at the majority, but I think across all cohorts. There is an opportunity to continue to get better and when somebody decides to predominantly when someone decides to exit right up it really is one.
Two reasons, it's just the payers in IL that we haven't been able to get over.
Or that patient has gone through the process and then at the end of the site is youre not going to go on therapy right, which.
Whats happens it happens for Altair, so but again.
As a relatively small percentage as we've described and we're pleased with.
People sticking with it and the conversion rates, we've seen early on and knowing that those opportunities will only get better and they are already coming from a really good place.
Great Congrats again on the progress.
Thanks.
Thank you.
This concludes our question and answer session I would now like to turn it back to Greg Davis for closing comments.
Thank you and thanks, everyone for your time and for joining US today on our third quarter 2023 call and wish you a great rest of the day and look forward to following take care.
This does conclude the program you may now disconnect.
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